M.T. Deaton & Co. v. Leibrock

• Decision Date: 11 March 1988
• Docket Number: No. 16819,16819
• Court: Idaho Court of Appeals
• Parties: M.T. DEATON & CO., Chartered, Plaintiff-Respondent, v. Frank R. LEIBROCK, K. Danny Fouladpour, and Engineers/Surveyors Group, Inc., an Idaho corporation, Defendants-Appellants.

Page 905

759 P.2d 905

114 Idaho 614

M.T. DEATON & CO., Chartered, Plaintiff-Respondent, v. Frank R. LEIBROCK, K. Danny Fouladpour, and Engineers/Surveyors Group, Inc., an Idaho corporation, Defendants-Appellants.

No. 16819.

Court of Appeals of Idaho.

March 11, 1988.

Wilbur T. Nelson, Boise, for defendants-appellants.

John B. Kugler, Pocatello, for plaintiff-respondent.

SMITH, Judge, Pro Tem.

This is an appeal by clients of an accounting firm from a judgment entered against them for collection of fees. The sole issue is whether the evidence provided sufficient proof of accounts stated to support the judgment. We affirm.

M.T. Deaton & Company (Deaton), an accounting firm, provided services for now defunct H & V Engineering, Inc. P.A. (H & V) and for its successor corporation, Engineers/Surveyors Group, Inc. P.A. (the Group). Frank Leibrock and Danny Fouladpour are assignees of some of H & V's liabilities, and are officers of the Group.

Deaton sued for collection of monies due from the appellants, alleging two causes of action. The claims arose as follows. Deaton had performed accounting services for H & V on a continuing basis. Deaton sent H & V regular statements of account, including a balance. Through written agreement with H & V, Leibrock and Fouladpour assumed some of H & V's liabilities. These liabilities included a set amount on H & V's account with Deaton. Deaton's first cause of action was against Leibrock and Fouladpour based on the assumed obligation.

In 1983 the Group had used Deaton's services in investigating suspected employee embezzlement. Deaton sent regular statements of account to the Group. Deaton's second cause of action alleged a claim for the balance of this account.

On motion for summary judgment filed by Deaton, the district court entered a partial summary judgment against Leibrock and Fouladpour on the first cause of action in the amount of $9,906.09, including service charges. Thereafter, Leibrock, Fouladpour, and the Group filed an answer, denying any obligation and alleging the complaint failed to state a cause of action. Further, by way of counterclaim and third-party complaint, the Group alleged malpractice by employees of Deaton.

Trial was held on Deaton's second cause of action. Deaton presented its case. After Deaton rested, the Group moved to dismiss the action. The court denied the motion. Defense counsel then stated he had no evidence to present. All parties waived findings of fact and conclusions of law, and the judge ruled from the bench in favor of Deaton. Later that same day, the district judge entered judgment reconfirming the partial summary judgment on the first cause of action and determining that the amount then due with interest to date was $11,488.79. As to the second cause of action, judgment was given in the sum of $2,268.28 to Deaton. The Court also concluded that $3,500 was a reasonable amount to be awarded to Deaton for its attorney fees under I.C. §§ 12-120 and 12-121. Including costs awarded, the judgment totaled $17,628.07.

The main thrust of the appeal is appellants' contention that the action was brought upon an open account theory rather than an account stated theory; therefore, proof of an account stated was not within the scope of the pleadings. They argue that when an action is brought upon an open account for services, the plaintiff has the burden to prove what services were performed and that the amounts charged for such services were reasonable. They contend there was no such proof offered either on the summary judgment motion or at the trial. They also argue the evidence was not sufficient to support an action on an account stated.

Preliminarily, we are faced with an unusual threshold issue which must be resolved before we approach the appeal on its merits. As noted, the parties stipulated to waive findings of fact and conclusions of law, and none were made. ¹ We are thus initially presented with the question: what effect, if any, will a waiver of findings and conclusions have where the issue on appeal concerns the sufficiency of evidence to support a judgment?

In Ruthruff v. Ruthruff, 52 Idaho 330, 14 P.2d 958 (1932), our Supreme Court held that when findings are waived and not made, a judgment will not be overturned unless there was evidence before the trial court requiring it to reach a contrary decision. Through his special concurrence, Justice Leeper further expounded on this rule. He noted a presumption exists that, where findings are waived and not made, the trial court found every fact necessary to sustain its judgment. See, e.g., Bunnell & Eno Investment Co. v. Curtis, 5 Idaho 652, 51 P. 767 (1897). Moreover, citing Arizona case law, he explained that under such circumstances the Supreme Court was "bound to uphold the order if there is any reasonable theory of the case upon which judgment can be sustained and there is sufficient evidence in support thereof." Ruthruff v. Ruthruff, supra, 52 Idaho at 333, 14 P.2d at 959.

According to our research, the position advocated by Justice Leeper appears to be the majority rule and is still the rule followed in Arizona. See Master Records, Inc. v. Backman, 133 Ariz. 494, 652 P.2d 1017 (1982); Equitable Life Assurance Society v. Anderson, 151 Ariz. 355, 727 P.2d 1066 (App.1986). We note, however, that Arizona does not expressly provide for waivers of findings of fact. Rule 52(a), Rules of Civil Procedure, 16 A.R.S.

Another state, New Mexico, expressly provides that a party may waive findings of fact. NMSA 1-052(B)(1)(f) (1987). The New Mexico courts have interpreted this provision to prohibit on appeal a review on the sufficiency of the evidence. See Smith v. Maldonado, 103 N.M. 570, 711 P.2d 15 (1985); Kipp v. McBee, 78 N.M. 411, 432 P.2d 255 (1967).

We see reasonable policy support for both of the above approaches. We are more persuaded, however, by the rule suggested by Justice Leeper in Ruthruff. Therefore, our review under circumstances where findings have been waived and not made will be limited. We will presume that the trial court found every fact necessary for its judgment. Accordingly, we will uphold the judgment on any reasonable theory supported by substantial, competent evidence.

I

An open account is an account kept open in anticipation of future transactions. It is an account where the balance might be subject to adjustment due to the respective demands of the parties. An account stated is an account in which the balance has been ascertained and mutually agreed to by the parties. It is a new contract distinct from any original agreement. Argonaut Insurance Companies v. Tri-West Construction Co., 107 Idaho 643, 691 P.2d 1258 (Ct.App.1984).

While open accounts and accounts stated are perceived in law as separate actions, both are simply different methods of proving amounts owed. Because the parties are not in agreement, an open account action requires proof of services rendered, and a showing that the amounts charged were reasonable. An account stated action requires a showing of mutual assent that an amount is a final balance of account agreed to by the parties and a writing evidencing the final balance. Assent may be implied from failure to object to a billing within a reasonable time. Thus, any written account may become an account stated through acquiescence in its correctness. O'Harrow v. Salmon River Uranium Development, Inc., 84 Idaho 427, 373 P.2d 336 (1962); Argonaut Insurance Companies v. Tri-West Construction Co., supra.

The following evidence was presented on motion for summary judgment as to the first cause of action: the written agreement,...